Computerized stock exchange trading system automatically formatting orders from a spreadsheet to an order entry system

ABSTRACT

An improvement in computer automated stock exchange trading whereby a graphic user interface with a mouse and display is used to select parameters such as share symbol, price selection, order size, and transaction type, as well as other indicators to launch a trading order to the order entry system of a stock exchange computer. Further improvements include a programmed interface by which data on a group of shares may be read from a spreadsheet formulated into an order and launched automatically or in response to a signal from an operator so as to trade an index or basket of shares substantially instantaneously.

This invention relates to automated means for effecting the purchase andsale of shares traded on a stock exchange. More particularly, it relatesto computer software and hardware by which an operator mayinstantaneously effect the transfer of shares of a large number ofcorporations.

BACKGROUND

For many years the trading of shares listed on a stock exchange wereeffected by the activities of people known as traders on the tradingfloor of a stock exchange, and were confirmed by some form of notationor writing on paper. Once effected, the trades or transfers of shareswere formally reported to brokers for the purchasing and sellingcustomers in a formal way with or without the delivery of the sharecertificates.

More recently the transactions have become automated so that trades maybe done by a trader operating a keyboard to enter the necessary commandsinto a terminal connected to the mainframe computer of the stockexchange, or a small personal computer with a terminal emulator. Withthis automated system a trader may enter an order to buy or sell whichis transmitted to the central system of the stock exchange where itmatched with another trader who is willing to sell or buy the sameshares, and the computer then confirms the completion of the transactionto each trader, and the transaction is confirmed and recorded by meansof a hard copy generated on a printer.

Although this computerized automated system was much faster than thetrading floor, it still required a trader to key in by hand thenecessary data and commands for each individual stock being traded. Fromthe information available at a terminal, the trader/operator would haveto input the symbol for the company shares, the price, the exchange, thesize of the order, and the instructions to buy, sell, cross or shorttrade the stock.

It has even become possible to effect trades in certain stocksautomatically when they reach a certain price level.

However, modern investment strategies involve the investment in largegroups or "basket" of listed shares as part of an entire portfolio whichis strategically selected to provide a balance of growth potential,income generation, and risk avoidance. These portfolios are often heldby mutual funds, banks, insurance companies, or other institutionalinvestors, and they are frequently being changed to adjust the balancein the factors which effect growth, income and risks.

Some institutions invest in an established mixture of stocks whichreflect the current economic climate in the country, such as the TSE 35,the TSE 100, the TSE 300, and in the United States the Dow Jones orother representative portfolios. In some cases institutional investorswill establish their own collection of shares which it considers torepresent their investment strategy and objectives. These may beweighted in favour of industry groups such as mining companies,financial institutions, manufacturing, or others considered preferableby the investment manager.

As a result of this strategy of investing in a mixed "basket" of shares,institutional investors are often increasing or decreasing theirinvestment in the entire range of shares in a basket or index. Thistherefore requires a large number of trades in order to effect thesingle investment move. Hitherto, this has been done by atrader/operator keying in the necessary trades in each individual stockthrough a computer terminal. Where the portfolio includes a list of 100stocks, for example, this is a lengthy process and in fact the problemarises that the prices of many shares would change during the time ittakes to key in the various orders, and the original conditionsnecessary to satisfy the requirements of the particular trade may nolonger be present.

SUMMARY OF THE INVENTION

It is therefore the purpose of the present invention to provide anautomated, computerized trading system in which multiple share orderentries can be executed automatically within seconds by thetrader/operator in activating a few entries on a keyboard. This methodof trading is accomplished by means of the present invention in which alist of stocks is continually monitored and their prices recorded on a"spreadsheet format" on a personal computer and displayed on a screen.When the composite price of the list of stocks conforms to certainpredetermined parameters, the trader can execute the necessaryinstructions to transform the list into an order on the personalcomputer (which is connected to the computerized order entry system ofthe stock exchange, which may be a mainframe), and the order will beimmediately processed by the computer and sent to the exchange's orderentry system. Thus, the purchase or sale of a basket comprising variousnumbers (volumes) of a variety of shares can be executed in a matter ofseconds before the price or other conditions have changed.

By means of the system programmed in accordance with the presentinvention, a conventional terminal or personal computer capable ofcommunication with a stock exchange central computer can be adapted toread, process, and react to information from the stock exchange, and/orcommands of the operator and automatically and quickly perform multipletrades in a manner described above.

DESCRIPTION OF THE PREFERRED EMBODIMENT

The invention may be better understood by a description of oneembodiment with reference to the attached drawings in which:

FIG. 1 is a schematic illustration of a mainframe stock exchangecomputer to which a series or terminals or personal computers areconnected each comprising a display screen and keyboard;

FIGS. 2A, 2B and 2C show a graphic user interface suitable for use inexecuting single stock transactions;

FIGS. 3A and 3B show a graphic user interface used in effecting multipletrades in a basket comprising various volumes of a list of shares;

FIG. 4 is a schematic block diagram which illustrates the sequence andflow of data and commands by which the system is used.

In the system illustrated in the attached drawings FIG. 1 shows amainframe computer 2 used to process all the data relating to the stockslisted on a stock exchange, such as the TSE, the VSE, or the NYSE, asthe case may be. Since the advent of computerized trading, thesemainframe central computers are connected to a variety of terminals,such as 4, in various trading offices of brokerage houses through thecity and abroad. By means of the individual terminals, traders mayreview data on the display screen 8 and input the necessary informationand instructions on the keyboard 6 whereby a given volume of aparticular stock is bought or sold (or crossed or shorted) in a mannerwhich is the automated equivalent of an individual transaction on thetrading floor.

Such a network is referred to, in the case of the Toronto StockExchange, as "CATS" which is an abbreviation for "Computer Aided TradingSystem", and similar systems are now commonly used and operated by manystock exchanges.

FIG. 2 illustrates an improvement which comprises a graphic userinterface with a network such as CATS which allows a trader/operator touse the trading system more quickly and efficiently.

Whereas previously the data necessary for a transaction (stock symbol,volume, price, buy or sell, etc., etc.) had to be entered on thekeyboard and showed up in the screen area 10 before the order could belaunched to the central processing unit, the present invention allowsthe instructions to be put in much more quickly, more easily and withless error.

In the embodiment illustrated in FIG. 2, the trader/operator can enterthe symbol representing the stock in the area 12 followed by the priceat which the transaction is to be completed in space 14 (which may be aselected price or the bid offer or last price derived from the CATSdata). Then the size of the order (or volume of the transaction) may beindicated in space 16 by selecting the appropriate nominal figures1,000, 5,000, 10,000, 50,000 or by inserting the precise volume in thebox 18. Many of the instruction choices provided by this interface (suchas bid, offer, last, ID, volume, exchange, transaction) may be enteredwithout keying by using a mouse as illustrated at 10 in FIG. 1, whichdirects a cursor or indicator to the command.

In the illustrated embodiment the other information may be selected,such as the appropriate exchange in area 20, the type of transaction inarea 22, the buy and sell IDs in areas 24 and 26. Other areas 28provided by the interface include features to provide variousinformation from the data bank as an aid to the operator.

To effect individual transactions an operator may, by mouse or acombination of mouse and keyboard, enter the necessary data and commandsand quickly transmit the transaction to a stock exchange.

Thus, by means of the interface illustrated in FIG. 2, transactions of asingle stock through a computer aided trading system may be more quicklyand efficiently executed.

The second aspect of the present invention is illustrated in FIG. 3which is a reproduction of a display screen which is part of themultiple stock trading system.

By means of the software of this invention, the terminal or personalcomputer illustrated in FIG. 1 can be used to connect the spreadsheet ofthe system to the data base of the stock exchange mainframe and displaythe information (including symbol, volume of shares, bid, first and lastprice) in the area 30 of the display screen of the terminal as shown inFIG. 3. For purposes of trading an index or custom basket of shares, thedisplay will contain the information with respect to the shares includedin the index or basket as illustrated. The system then executes adynamic data link to the spreadsheet which causes the spreadsheet toread the list of stocks to the multiple order trading system of thepresent invention. In the next step the system captures the spreadsheetdata and makes each stock price and volume a variable that is insertedin a list of preprogrammed commands. The list is then sent to the orderentry system of the stock exchange with a single key stroke.

Thus, each of the stocks and the pertinent data relating thereto isentered into the multiple order entry system, and at the appropriatetime and with the appropriate command, the entire basket can be dealtwith in a single transaction within a matter of seconds before prices orother criterion change.

The present system therefore eliminates the need for a trader/operatorto enter each individual stock and the transaction criterion, which inthe case of 100 stocks or so, would be time-consuming, prone to error,and difficult to coordinate because of the changing prices and theirrelationship to the transaction criterion.

Also illustrated in FIG. 3 is a box 32 in which the necessary commandsmay be entered from a keyboard.

Also illustrated, in area 34, is a series of commands which may bequickly entered by means of a mouse or similar device, includingidentification of the basket of shares to be traded 36, the type oftransaction (buy, sell, cross, or sell short) 38, the appropriate buy ID40 or sell ID 42, and the price (bid, offer, or last) 44. When theappropriate commands have been entered the transaction may be executedby pressing the launch button 46 and all of the shares of the basket aretraded almost instantaneously.

As in all cases a provision is made for the entry of a pass word 48 toprovide security against unauthorized use and other functions which arecommonly associated with graphic user interface are provided.

Therefore, by means of the present system, a terminal or personalcomputer may be used to capture from a spreadsheet all the datanecessary to trade in a selected list or group of shares, and byinserting this data into the preprogrammed commands of the system, allof the necessary commands to execute the trade in all of the shares maybe sent to the stock exchange order entry system in a single set ofsignals.

It will be appreciated that this system will enable a trader to deal inbaskets of shares, whether they are related to a standard index, such asthe TSE 35 or the TSE 100, or a customized basket of shares designed foror by each customer and will be able to effect transactions quickly andwithout the complications that arise from the time delay in enteringeach stock transaction separately.

FIG. 4 is a block diagram and flow chart which illustrates schematicallyhow the present invention facilitates a faster more efficient operationof the automated trading facilities. In the diagram the mainframe orcentral computer of the stock exchange is shown at 50 and includes aticker feed system 52 which constantly generates updated data on theprices and volumes of various stocks being traded, and delivers theupdated data to a server 54 where the data is stored and accessible toany terminals which are connected to the network. The information in theserver is read by the spreadsheet 56 of a terminal, such as the oneillustrated in FIG. 1, which is designed to read and display a givenbasket of shares with the pertinent data with respect to volumes, bid,offer, last, etc. Block 58 represents the multiple order trading systemof the present invention which reads the data from the spreadsheet,including all the data on a given basket of shares, organizes the datainto the proper format for automated trading, and issues the multipleorders to the order entry system 60 of the central computer 50 at thestock exchange.

By having the data formatted by the multiple order launcher, thetransaction of a whole basket of shares can be effected quickly, easily,with fewer errors and within the time frame for which the criterion orinstructions for the transaction are valid.

By providing a means, such as the multiple order launcher, which iscapable of capturing all the data on a spreadsheet, selecting what isrequired, and organizing it into the form of an order, the presentinvention creates a bridge between the spreadsheet, which contains thenecessary data on a group of stocks, and the order entry system of thestock exchange which effects a transaction in those stocks.

Furthermore, because it can use and format the data more quickly andcorrectly than an operator on a keyboard, it is capable of effecting atransaction within the time and parameters which are rapidly changing,in a manner which an operator could not accomplished. Therefore, insteadof merely processing data, it is capable of activating and controllingstock transactions. In this respect the system may be adapted toinitiate a transaction automatically when certain criterion are met, ormay be designed to create a signal when the criterion are met so that atrader/operator may make the final decision or judgment to execute thetransaction or not, and may then execute it substantiallyinstantaneously once the decision has been made.

Once the order entry has been received by the exchange system, thetransaction is completed and the appropriate records and confirmationdocuments are produced in the usual manner without any further activityby the trader.

It will, of course, be realized that numerous modifications andvariations from the illustrated embodiments may be employed withoutdeparting from the inventive concept herein.

The embodiments of the invention in which an exclusive property orprivilege is claimed are defined as follows:
 1. A computerized tradingsystem comprising:a display; and a controller coupled to the display,the controller:receiving data from an exchange, transferring thereceived data to a spreadsheet, selecting at least one group of datafrom the spreadsheet, formatting the selected at least one group of datafor transmission to an order entry system of the exchange, theformatting involving converting each item of the selected at least onegroup of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange, and transmitting the formatted selected atleast one group of data to the order entry system of the exchange. 2.The system according to claim 1, wherein the data is received from theexchange in real time.
 3. The system according to claim 1, wherein theformatted selected at least one group of data is transmitted based on atleast one variable parameter.
 4. The system according to claim 1,wherein the formatted selected at least one group of data is transmittedbased on at least one predetermined parameter.
 5. The system accordingto claim 1, further comprising an interface coupled to the controller,the interface interacting with the display and affecting the selecting,formatting and transmitting by the controller.
 6. The system accordingto claim 1, wherein the at least one group of data is selected based onat least one variable parameter.
 7. The system according to claim 6,further comprising an interface coupled to the controller, the interfaceinteracting with the display, and wherein the selecting, formatting andtransmitting by the controller are controlled based on the interactionof the interface with the display.
 8. The system according to claim 1,wherein the at least one group of data is selected based on at least onepredetermined parameter.
 9. The system according to claim 8, furthercomprising an interface coupled to the controller, the interfaceinteracting with the display, and wherein the selecting, formatting andtransmitting by the controller are controlled based on the interactionof the interface with the display.
 10. The system according to claim 1,wherein the display includes a graphic display.
 11. The system accordingto claim 10, wherein the graphic display includes representations ofsymbol, price, order size and transaction type.
 12. The system accordingto claim 1, further comprising an interface coupled to the controller.13. The system according to claim 12, wherein the transmitting isaffected by at least one operator interaction with the interface. 14.The system according to claim 12, wherein the selecting is affected byat least one operator interaction with the interface.
 15. The systemaccording to claim 12, wherein the interface is a mouse.
 16. The systemaccording to claim 12, wherein the interface is a mouse and a keyboard.17. The system according to claim 12, wherein the interface securedlyinteracts with the display.
 18. The system according to claim 17,wherein the secured interacting includes the prior input of a securitycode.
 19. The system according to claim 12, wherein the interfaceinteracts with the display.
 20. The system according to claim 19,wherein the interface is a mouse, and the display includes a graphicdisplay.
 21. The system according to claim 19, wherein the selecting,formatting and transmitting by the controller are controlled based onthe interaction of the interface with the display.
 22. A computerizedtrading system comprising:a display including a graphic display, thegraphic display including representations of symbol, price, order sizeand transaction type; a controller coupled to the display, thecontroller:receiving data from an exchange in real time, transferringthe received data to a spreadsheet, selecting at least one group of datafrom the spreadsheet, formatting the selected at least one group of datafor transmission to an order entry system of the exchange, theformatting involving converting each item of the selected at least onegroup of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange, and transmitting the formatted selected atleast one group of data to the order entry system of the exchange; andan interface coupled to the controller, the interface interacting withthe graphic display, wherein the selecting, formatting and transmittingby the controller are controlled based on the interaction of theinterface with the graphic display.
 23. A method for computerizedtrading comprising the steps of:receiving data from an exchange;transferring the received data to a spreadsheet; selecting at least onegroup of data from the spreadsheet; formatting the selected at least onegroup of data for transmission to an order entry system of the exchange,the formatting involving converting each item of the selected at leastone group of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange; and transmitting the formatted selected atleast one group of data to the order entry system of the exchange. 24.The method according to claim 23, further comprising the step ofprocessing the received data in the spreadsheet.
 25. The methodaccording to claim 23, further comprising the step of processing thereceived data from the spreadsheet.
 26. The method according to claim23, wherein the data is received from the exchange in real time.
 27. Themethod according to claim 23, wherein the at least one group of data isselected based on at least one variable parameter.
 28. The methodaccording to claim 23, wherein the at least one group of data isselected based on at least one predetermined parameter.
 29. The methodaccording to claim 23, wherein the formatted selected at least one groupof data is transmitted based on at least one variable parameter.
 30. Themethod according to claim 23, wherein the formatted selected at leastone group of data is transmitted based on at least one predeterminedparameter.
 31. The method according to claim 23, further comprising thestep of an operator interacting with the spreadsheet, the operatorinteraction affecting the transmitting.
 32. The method according toclaim 23, further comprising the step of an operator interacting withthe spreadsheet, the operator interaction affecting the selecting. 33.The method according to claim 23, further comprising the step of anoperator interacting with the spreadsheet, the operator interactionaffecting the selecting, formatting and transmitting.
 34. The methodaccording to claim 23, further comprising the step of evaluating theaccessability by a user.
 35. The method according to claim 23, furthercomprising the step of displaying spreadsheet data in a graphic format.36. The method according to claim 35, wherein the graphic formatincludes representations of symbol, price, order size and transactiontype.
 37. A method for computerized trading comprising the stepsof:receiving data from an exchange in real time; transferring thereceived data to a spreadsheet; processing the received data in thespreadsheet; selecting at least one group of data from the spreadsheet;formatting the selected at least one group of data for transmission toan order entry system of the exchange, the formatting involvingconverting each item of the selected at least one group of data from thespreadsheet into a corresponding variable for insertion into apreviously programmed list of commands of an order entry system of theexchange; and transmitting the formatted selected at least one group ofdata to the order entry system of the exchange; and displaying thespreadsheet in a graphic format.
 38. A computerized trading systemcomprising:a display; a receiver, the receiver receiving data from anexchange in real time; a controller coupled to the receiver and to thedisplay, the controller:automatically transferring the received data toa spreadsheet, automatically selecting at least one group of data fromthe spreadsheet, based on at least one parameter, automaticallyformatting the selected at least one group of data for transmission toan order entry system of the exchange, the formatting involvingconverting each item of the selected at least one group of data from thespreadsheet into a corresponding variable for insertion into apreviously programmed list of commands of an order entry system of theexchange; and a transmitter coupled to the controller, the transmittertransmitting the formatted selected at least one group of data to theorder entry system of the exchange.
 39. The system according to claim38, wherein the at least one parameter is predetermined.
 40. The systemaccording to claim 38, wherein the at least one parameter is variable.41. A method for computerized trading comprising the stepsof:automatically receiving data from an exchange in real time;automatically transferring the received data to a spreadsheet;automatically selecting at least one group of data from the spreadsheet,based on at least one parameter; automatically formatting the selectedat least one group of data for transmission to an order entry system ofthe exchange, the formatting involving converting each item of theselected at least one group of data from the spreadsheet into acorresponding variable for insertion into a previously programmed listof commands of an order entry system of the exchange; and automaticallytransmitting the formatted selected at least one group of data to theorder entry system of the exchange.
 42. The system according to claim41, wherein the at least one parameter is predetermined.
 43. The systemaccording to claims 41, wherein the at least one parameter is variable.44. A computerized trading system comprising:a display; and a controllercoupled to the display, the controller:receiving data from an exchange,transferring the received data to a spreadsheet, selecting a pluralityof transactions based on the data transferred to the spreadsheet,formatting the selected plurality of transactions into one order fortransmission to an order entry system of the exchange, the formattinginvolving converting each item of a selected at least one group of datafrom the spreadsheet into a corresponding variable for insertion into apreviously programmed list of commands of the order entry system, andtransmitting the formatted order to the order entry system of theexchange for execution of each one of the plurality of transactions as asingle transaction.
 45. A computerized trading system comprising:adisplay; and a controller coupled to the display, thecontroller:receiving data from an exchange, transferring the receiveddata to a spreadsheet as a plurality of data items, capturing at least aportion of the data items transferred to the spreadsheet, formattingeach captured data item as a variable for insertion into a previouslyprogrammed list of commands of an order entry system of the exchange,and performing a single transmit operation in order to transmit the listof commands to an order entry system of the exchange.
 46. A method forcomputerized trading, comprising the steps of:receiving data from anexchange; transferring the received data to a spreadsheet; selecting aplurality of transactions based on the data transferred to thespreadsheet; formatting the selected plurality of transactions into oneorder for transmission to an order entry system of the exchange, theformatting involving converting each item of a selected at least onegroup of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange; and transmitting the formatted order tothe order entry system of the exchange for execution of each one of theplurality of transactions as a single transaction.
 47. A method forcomputerized trading, comprising the steps of:receiving data from anexchange; transferring the received data to a spreadsheet as a pluralityof data items; capturing at least a portion of the data itemstransferred to the spreadsheet; formatting each captured data item as avariable for insertion into a list of commands, the formatting involvingconverting each item of a selected at least one group of data from thespreadsheet into a corresponding variable for insertion into apreviously programmed list of commands of an order entry system of theexchange; and performing a single transmit operation in order totransmit the list of commands to an order entry system of the exchange.48. A computerized trading system comprising:a display including agraphic display, the graphic display including representations ofsymbol, price, order size and transaction type; a controller coupled tothe display, the controller:receiving data from an exchange in realtime, transferring the received data to a spreadsheet, selecting aplurality of transactions based on the data transferred to thespreadsheet, formatting the selected plurality of transactions into oneorder for transmission to an order entry system of the exchange, theformatting involving converting each item of a selected at least onegroup of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange, and transmitting the formatted order tothe order entry system of the exchange for execution of each one of theplurality of transactions as a single transaction; and an interfacecoupled to the controller, the interface interacting with the graphicdisplay, wherein the selecting, formatting and transmitting by thecontroller are controlled based on the interaction of the interface withthe graphic display.
 49. A computerized trading system comprising:adisplay including a graphic display, the graphic display includingrepresentations of symbol, price, order size and transaction type; acontroller coupled to the display, the controller:receiving data from anexchange in real time, transferring the received data to a spreadsheetas a plurality of data items, capturing at least a portion of the dataitems transferred to the spreadsheet, formatting each captured data itemas a variable for insertion into a previously programmed list ofcommands of an order entry system of the exchange, and performing asingle transmit operation in order to transmit the list of commands toan order entry system of the exchange; and an interface coupled to thecontroller, the interface interacting with the graphic display, whereinthe capturing, formatting and transmitting by the controller arecontrolled based on the interaction of the interface with the graphicdisplay.
 50. A computerized trading system comprising:a display; areceiver, the receiver receiving data from an exchange in real time; acontroller coupled to the receiver and to the display, thecontroller:automatically transferring the received data to aspreadsheet, automatically selecting a plurality of transactions basedon the data transferred to the spreadsheet, and automatically formattingthe selected plurality of transactions into one order for transmissionto an order entry system of the exchange, the formatting involvingconverting each item of a selected at least one group of data from thespreadsheet into a corresponding variable for insertion into apreviously programmed list of commands of an order entry system of theexchange; and a transmitter coupled to the controller, the transmittertransmitting the formatted order to the order entry system of theexchange for execution of each one of the plurality of transactions as asingle transaction.
 51. A computerized trading system comprising:adisplay; a receiver, the receiver receiving data from an exchange inreal time; a controller coupled to the receiver and to the display, thecontroller:automatically transferring the received data to a spreadsheetas a plurality of data items, automatically capturing at least a portionof the data items transferred to the spreadsheet, and automaticallyformatting each captured data item as a variable for insertion into apreviously programmed list of commands of an order entry system of theexchange; and a transmitter coupled to the controller, the transmitterperforming a single transmit operation in order to transmit the list ofcommands to an order entry system of the exchange.
 52. A method forcomputerized trading comprising the steps of:automatically receivingdata from an exchange in real time; automatically transferring thereceived data to a spreadsheet; automatically selecting a plurality oftransactions based on the data transferred to the spreadsheet;automatically formatting the selected plurality of transactions into oneorder for transmission to an order entry system of the exchange, theformatting involving converting each item of a selected at least onegroup of data from the spreadsheet into a corresponding variable forinsertion into a previously programmed list of commands of an orderentry system of the exchange; and automatically transmitting theformatted order to the order entry system of the exchange for executionof each one of the plurality of transactions as a single transaction.53. A method for computerized trading comprising the stepsof:automatically receiving data from an exchange in real time;automatically transferring the received data to a spreadsheet as aplurality of data items; automatically capturing at least a portion ofthe data items transferred to the spreadsheet; automatically formattingeach captured data item as a variable for insertion into a previouslyprogrammed list of commands of an order entry system of the exchange;and automatically performing a single transmit operation in order totransmit the list of commands to an order entry system of the exchange.